Capitalypse

"An apocalyptic mood has seized the highest levels of global capital as the global financial system continues to implode. This implosion is but the latest financial crisis to wrack global capitalism. Financial crises are inevitable since capitalist growth has increasingly been driven by speculative bubbles such as the housing bubble in the United States. The increasingly uncontrolled financial gyrations stem from the increasing divergence between an expansive financial economy and a stagnant real economy. This "disconnect" stems from the persistent stagnationist trends in the real economy owing to overproduction or overcapacity. The search for profitability is capitalism's driving force, and increasingly, significant profits can only be obtained from financial speculation rather than investment in industry. This is, however, a volatile and unstable process since the divergence between momentary financial indicators like stock and real estate prices and real values can proceed only up to a point before reality bites back and enforces a "correction." The bursting of the US housing bubble is one such correction, and it is leading not only to a recession in the US but to a global downturn owing to the unprecedented level of integration fostered by corporate-led globalization. It will not be easy to restore dynamism by fostering another speculative bubble, for instance, by resorting to "military Keynesianism."

At the global elite's annual weeklong party at Davos in late January, George Soros sounded positively necrological, declaring to one and all that the world was witnessing "the end of an era." World Economic Forum host Klaus Schwab spoke of capitalism getting its just desserts, saying, "We have to pay for the sins of the past." "It's not that the pendulum is now swinging back to Marxist socialism," he told the press, "but people are asking themselves, ‘What are the boundaries of the capitalist system?' They think the market may not always be the best mechanism for providing solutions.""

That's more like it (see next post!). From the brilliant people at the TransNational Institute

MENA economic reform

Paper at a Glance
• The key to successful reforms in the Middle East and North Africa (MENA) region is building on the linkages between democratic governance and market economies.
• Demographic pressures, an inefficient public sector, and the need for economic diversification led by the private sector are some of the top challenges facing MENA countries.
• Meaningful reforms require moving away from entrenched state monopolies on political and economic power.
• MENA governments should focus on creating an enabling environment for the private sector to lead sustainable economic growth and job creation.
• Through institutions of democratic governance, grassroots private sector voices can provide invaluable guidance on the design and implementation of reforms. (Thanks D.)

From the Center for International Private Enterprise. The pdf document is 23 pages long. Classical economics with no indication on how to actually implement this and about the linkages with the rich nations with strong states and protectionist policies.

"Koeppel traces the ubiquitous yellow fruit back to the Garden of Eden, where, he argues, it, not the apple, was the "forbidden fruit" that Eve offered Adam."

Coup bas

"With food production pitifully low for a country with fertile land and a year-round growing climate, farmers need more land and more autonomy in tilling it to boost output. Cuba imports at least 70% of its food, including a record $437-million worth from the United States last year.

Raul Castro, the president's 76-year-old brother and potential successor, and other Cuban leaders for months have indicated that farmers may receive legal rights to their land and guaranteed market prices for their produce.

Fidel Castro, 81, has long opposed anything that smacks of private enterprise or disproportionately enriches one group of Cubans. But his brother and lifelong No. 2, who began leading the country when Fidel fell ill and temporarily ceded power to him 19 months ago, has been speaking openly about the need to stimulate agricultural output by turning land back to those who want to work it and boost their living standards by the sweat of their brows."

Air time

Lebanese selling canned air with the stamp of the Ministry of Economy. Hot air: plenty of it around.

No title

"I’m visiting the Guo-li-zhuang restaurant, a specialist penis and testicle emporium that caters mainly to wealthy businessmen and Communist party officials (who, truth be told, are often one and the same).

It offers every conceivable John Thomas you could ever want, which probably isn’t very many. Nonetheless, the menu is both extensive and impressive.

I ask a chef to show us the preparation of a penis first, so that I can get a feel for the process. He enters holding aloft an eye-wateringly large yak’s knob. It’s about 45cm long, but thin, so thin. It’s been boiled gently and - I can’t believe I’m writing this - peeled, except for a hunk of foreskin still clinging on to the end. He cuts the thing in half lengthways with a pair of scissors."

Salmon says

"A virus called infectious salmon anemia, or I.S.A., is killing millions of salmon destined for export to Japan, Europe and the United States. The spreading plague has sent shivers through Chile’s third-largest export industry, which has left local people embittered by laying off more than 1,000 workers.

It has also opened the companies to fresh charges from biologists and environmentalists who say that the breeding of salmon in crowded underwater pens is contaminating once-pristine waters and producing potentially unhealthy fish.

The salmon companies “are robbing us of our wealth,” said Victor Guttierrez, a fisherman from Cochamó, a town ringing the Gulf of Reloncavi, which is dotted with salmon farms. “They bring illnesses and then leave us with the problems.”"

The buffalo in the room

"In the last few months, sales of buffalo mozzarella have dropped 40 percent, the product’s trade association says. The problem makes for a near-perfect morality play about Italy: For years, the nation’s paralyzed political class has done little to halt huge-scale illegal dumping of trash, some of it toxic, around Naples. That area happens to produce some of the best mozzarella.

A new trash crisis peaked yet again, and last week fears that food might be contaminated seemed confirmed when health officials announced elevated levels of the carcinogen dioxin in samples of buffalo mozzarella. Last weekend, South Korea banned imports of the cheese, and Italy began scrambling to avoid deep damage to one of its most emblematic products."

Salt

"Like the absurdly expensive balsamic vinegars of years past, the plainest of kitchen staples has been elevated to a luxury good. At Williams-Sonoma’s Web site, customers can now spend up to $28 on a 3.5-ounce jar of salt.

Granted, that one contains truffles, while another costing $18 is 5.7 ounces “gently smoked over wood chips from aged oak Chardonnay wine barrels.” The purveyor of fine cooking accessories also sells an 8.8-ounce jar of salt harvested from “the island of Ré, off France’s Atlantic coast, since the seventh century” and a 4-ounce lump from “the foothills of the Himalayas” that you grate yourself. Those are both closer to $10 apiece."

D. sent me this NYT article a while ago, but I haven't gotten around to blogging it. I wonder if it would be possible to make a fleur de sel from Lebanon and market it. I know they make salt in Enfeh, and although I am incapable of telling the difference between the different salts, I will if this can help preserve livelihoods.

Hot summer

Rasha digs into the electricity privatization file where there is a meeting of minds between the opposition and the loyalists. I've said it and I repeat it, on the social and economic agenda, there are no differences between opposition and loyalists. If you can read Arabic, read the article, it looks like there will be no electricity in Lebanon this summer.

FPI

The Lebanon food price index from Al Safir. Useful if you're into this kind of stuff. I like it.

Vive la difference

Price increase in Lebanon is 43% since last July. That's higher than the global price increases. Why?

Badael/Alternatives

The new Badael page in Al-Akhbar: Usame al Khalidi on science and truth. My editorial on the selectivity of some organization in campaigning for rights issues. Osteoporosis in men, the story of wheat, and Rajana Hamiyyeh greets the spring.

Day 2

My day at the conference was less exciting than I thought it would be, but I attended a couple of nice presentations (will link when available). Before I go any further, I must say that there was a lot of new vocabulary, but not really a lot of new ideas. Also, I couldn't help noticing how much more elaborate the PowerPoint presentations have become, especially those of the keynote speakers who tend to be renowned scientists and researchers and who I assume have someone to help them prepare the slides. As a general rule, but I might be wrong, I found that the presentations of delegates from the developing world were less fancy (and looked less professional) than those of delegates from richer countries. But the content did not vary much.

In the regional assessment of the impact of change on food systems, the picture was gloomy: In Southern Africa, Caribbeans and in the Indo-Gangetic plains, farming is in decline, farmers are older and dying (some as in India from suicide) and countries that were net producers 20 years ago are now net importers. To the question: "Is there a future for agriculture", the answer was a very depressing: "not unless we can deal with risks through some form of insurance in order to get young people back into farming". But my question is: who will produce the food? Better still: who is producing the food right now if everybody has become a net food importer?

There was a public evening lecture at the Sheldonian by Prabhu Pingali who until recently worked for FAO and who now works for the Gates foundation as head of agriculture policy and statistics. It was a bit generic (I asked a colleague what he thought about it and he said: he has a nice voice), but he listed, in the first half of the lecture, the changes facing the world's food systems:

1. Urbanization: the world is now 50-50 urban-rural. By 2030 it will be 70-30. Who will feed the urbans? Who will bring food to them? How will we get water and sanitation services.

2. Globalization and trade: Where to buy, from the local hinterlands or from foreign markets? The balance is tilting towards imports in many DW countries as the infrastructure is lacking for effective production in the hinterlands.

3. ICT and especially cell phones, which have allowed communication and market penetration.

4. Global increase in food prices, unfortunately only captured well by OECD countries. Poorer countries, lacking in infrastructure and reluctant to invest might not be able to capture the dividends of the increases in world food prices.

5. And finally climate change. The increase in the frequency of extreme events will affect farmers much more than in the increase in temperature.

It's a good check list.

Threat multiplier

"In a report to be presented at a summit of the 27-nation European Union in Brussels on Thursday, two top EU officials will add urgency. The essence of their report: "Climate change is a threat multiplier which exacerbates existing trends, tensions, and instability," says a story in Britain's The Guardian newspaper. It continues:

"The main message is that the immediate and devastating effects of global warming will be felt far away from Europe, with the poor suffering disproportionately in south Asia, the Middle East, central Asia, Africa, and Latin America, but that Europe will ultimately bear the consequences. This could be in the form of mass migration, destabilisation … radicalisation of politics and populations, north-south conflict because of the perceived injustice of the causes and effects of global warming, famines caused by arable land loss, wars over water, energy, and other natural resources."

Water supplies in the Middle East could be a major issue if temperatures were to continue increasing. The Financial Times quotes the EU paper:

"Existing tensions over access to water are almost certain to intensify in the region, leading to further political instability with detrimental implications for Europe's energy security and other interests. Water supply in Israel might fall by 60 per cent over this century....""

CSM article sent by D.

Activism

I attended a panel session today on "Responses of local food activists to climate change". There was a lady from the US, another from Uganda and a third one from Brazil. They made nice presentations about the work of their NGOs, especially in Brazil where sugar cane workers live in quasi slavery. Then someone asked whether they believe that their work will really change the way things are done, or whether activism was just a series of token gestures that merely scratched the surface. A general discussion followed, but the question was not answered. My feeling was that the answer was: "no", but no one had the courage to say it. My position is that in the absence of a comprehensive political ideology that goes beyond single issue campaigning, and in the absence of a global network capable of focusing on simultaneous actions in order to create critical mass, it is going to be very difficult to do more than scratch the surface.

Egypt boiling

"The government has sought to address the discontent in several ways. It
is especially attempting to improve subsidy provision, separating the
production and sale of subsidised bread--the main element in the
Egyptian diet--in order to reduce corruption. Families were allowed to
add children to their ration cards in February for the first time since
1988 (increasing the total number of beneficiaries from 40m to an
estimated 55m). Nevertheless, as rising wheat prices force more and
more people to rely on subsidised bread, the queues are lengthening and
supplies are coming under strain. Similar problems have also arisen
regarding diesel fuel, which is used to power machinery and farm
equipment. Shortages have led to outbreaks of fights at petrol
stations, and accusations that the government is deliberately keeping
stocks hidden to boost prices.

Consumer price inflation rose again in February, to 12.1% year on year,
up from 10.5% in January. The month-on-month increase was 1.8% in
February, compared with 4% in January. Food prices, which account for
40% of the basket of goods used to calculate consumer price inflation,
rose by 16.8% year on year in February, similar to the 16.2%
year-on-year increase recorded in January."

State Inc.

"The most important new forces in global business are aggressive, wealthy, and entrepreneurial. But they aren't corporations: they're authoritarian governments.

In the past five years, governments around the world have been transforming themselves into deal makers and business players on a scale never seen in the modern era. In China, state-owned oil giant PetroChina has become the largest company in the world, worth more than $1 trillion. In Russia, state-owned Gazprom has grown into the world's largest gas company. States are also wielding influence by directly buying into major private firms: The investment fund run by the Arab emirate of Abu Dhabi is now the world's largest, and recently spent $7.5 billion to become the top shareholder of the American financial giant Citigroup.

In Syria, the government of Bashar Assad has launched plans to emulate China, while in Iran both reformers and conservatives have discussed how to copy China. Raul Castro, who has visited China several times, reportedly wants to emulate Beijing in revamping Cuba's economy.

The rising price of oil has put a gusher of cash in the hands of authoritarian petrostates like Saudi Arabia and Russia, all of which now want to invest their cash hoards. With their pile of reserves, oil producers like the United Arab Emirates and Asian exporters have developed massive state-controlled funds that can buy into companies around the globe. Abu Dhabi's fund alone controls nearly $900 billion, while China's controls $200 billion and Kuwait's $250 billion."

From the Boston Globe a good article on state capitalism. But the author presents it as if things were radically different in the US or in Europe or in the rest of the Global North. What is different? That governments put political pressure on weaker countries to pave the way for home corporations? Everybody does that and foreign aid is used for that purpose, and so are bilateral trade agreements. That this pressure may sometimes be a bit more than diplomatic, as in Iraq? Read Naomi Klein. That the governments and the businesses are closely connected? Read Haliburton. The state is a business everywhere.

Seeds of aridity

"Six years ago, Jennifer Thomson, a molecular biologist in South Africa, trekked high into the Drakensberg mountain range seeking ways of cultivating food in an increasingly arid environment. After seven hours on the trail, she spotted an inhospitable-looking rock face dotted with green grassy tufts, a cluster of resurrection plants, so called for their ability to spring back to life after surviving periods of drought in a state of desiccated dormancy.

Thomson collected samples of the plant and began identifying its genes, with the aim of transferring them into a crop, corn, that plays a critical role in the African diet.

"We are trying to allow maize to survive under conditions when just a little bit of rain would make the difference," said Thomson, a professor at the University of Cape Town. "African farmers never know where the next water shortage will strike."

Her research is just one of many thousands of projects aimed at tackling one of the world's most pressing needs: helping farmers keep their crops growing as water supplies grow scarce."

I like this IHT article sent by D. But my concern is: who will get access to those seeds. Who will own the patents? Will the poor benefit? How? I feel there is too much reliance on technological solutions and on science for solution to global problems without appropriate framing in political economy.

In Oxford attending a conference on Food Security and Environmental Change. Will try to blog from here, but the internet connection I have in my room is miserable.